Suppose that there are two firms in a market, firm 1 and firm 2. The market is declining in size. The game starts in period 0, and the firms can compete in periods 0, 1, 2, 3, ... (i.e., indefinitely) if they so choose. Duopoly profits in period t for firm 1 are equal to 105 −10t, and they are 10.5 −t for firm 2. Monopoly profits (those if a firm is the only one left in the market) are 510 −25t for firm 1 and 51 −2t for firm 2. At the start of each period, each firm must decide either to “stay in” or “exit” if it is still active (they do so simultaneously if both are still active). Once a firm exits, it is out of the market forever and earns zero in each period thereafter. Firms maximize their (undiscounted) sum of profits. What is this game’s subgame perfect Nash equilibrium?

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Please no written by hand and no emage Consider the following Stackelberg duopoly. Both firms produce a homogenous good. Firm 1 chooses how much to supply first. Firm 2 chooses how much to supply after observing the quantity supplied by firm 1. The market demand is Q = 100 - 10P. For firm i, the total cost of production is TC (q) = 5q₁. In a Subgame Perfect Nash Equilibrium, how much does firm 2 produce?

Space 1 options: less than or equal to, equal to, greater than or equal to   Space 2 options: 0 0.5 1 8 16

Figure 11-5 Firm A Advertise Not Advertise Firm A 70 Firm A 30 Advertise Firm B 80 Firm B 150 Firm B Firm A 140 Firm A 90 Not Advertise Firm B 60 Firm B 100 Figure 11-5 shows the payoffs for two firms in a market that must decide whether or not to advertise. The dominant strategy is a) for Firm A to advertise but not Firm B. b) for neither firm to advertise. C) for both firms to advertise. d) for Firm B to advertise but not Firm A.

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Suppose that each of two firms in an oligopolistic industry has MC = 8 and together they face P = 68 - 2Q a) If the two firms compete in this market what are P, Q, q1, and q2? b) If the two firms collude what are P, Q, q1, and

QUESTION 13 Consider a market where two firms (1 and 2) produce differentiated goods and compete in prices. The demand for firm 1 is given by D₁(P₁, P2) = 140 - 2p1 + P2 and demand for firm 2's product is D2 (P1, P2) 140 - 2p2 + P1 Both firms have a constant marginal cost of 20. What is the Nash equilibrium price of firm 1? (Only give a full number; if necessary, round to the lower integer; no dollar sign.)

10:04 PM cb = Chegg Economics Vo LTE expert.chegg.com/expertqna Time remaining: 00:09:49 Consider the following payoff matrix for two oligopolists that are deciding what quantity to produce: Firm 2 High Quantity Low Quantity $70k; $70k $130k; $20k High Quantity Firm 1 $20k; $130k $100k; $100k Low Quantity In the Nash equilibrium of this game, what are the payoffs to each firm? O a. Firm 1 receives $130k and Firm 2 receives $20k. O b. Firm 1 receives $20k and Firm 2 receives $130k. O c. Firm 1 receives $100k and Firm 2 receives $100k. O d. Firm 1 receives $70k and Firm 2 receives $70k. Answer Skip 4G Exit 2 ¹20%

Question 2 Suppose there are two players, an entrant and an incumbent firm playing the following game: the entrant decides whether to stay out or enter. The incumbent decides whether to innovate or not. If the entrant stays out, the entrant firm gets a payoff of 0 whereas the incumbent firm gets a payoff od 1500, independent of the action of the incumbent firm. If the entrant enters and the incumbent doesn't innovate, the entrant gets 1200 whereas the incumbent gets 500. If the entrant enters and the incumbent innovates, the entrant and the incumbent get a payoff of 1000 each. a) Draw the normal form of the game and solve for the Nash equilibrium/equilibria. b) Suppose the game is dynamic: first the entrant decides whether to enter or stay out. If the entrant enters, the incumbent decides whether to innovate or not. If the entrant stays out, the incumbent doesn't get to play. Draw the extensive form of the fame, mark the subgames on paper and solve for the subgame-perfect Nash…